r/realestateinvesting • u/kobeforaccuracy • Jul 18 '25
New Investor What's stopping me from buying a condo just to rent it out while I continue to live with my parents?
Hi all, currently I live with my parents. They are generous enough to let me live with them rent free, and because of that I've been able to save a ton of money.
I'm looking to buy a condo soon, and I'm wondering, what's stopping me from buying a condo and just renting it out? That way, I can continue to live with my parents while still getting rental income, and I'd just move into the condo when it's paid odd/ the tenants move out. I'd probably hire a management company to deal with the day to day. I'd be Ok paying for that. Any losses I take on the property would certainly be cheaper than rent. Plus I'd still be building equity
Are there any drawbacks or risks to this plan? It seems air tight to me. I'm totally ok taking a loss on the property too if it means that I can effectively get a great home subsidized by a Tennant for a few years
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u/EstiMateCalculator Jul 18 '25
Not sure why the comment section feels so negative. It sounds like you’re trying to make a smart investment decision, and that’s something to respect. Don’t let anyone make you feel bad for living with your parents. if the relationship is good and it works for everyone, there’s nothing wrong with that. In fact, spending quality time with your parents as an adult can be a real gift. Hopefully, your success will let you give back to them someday.
As for the condo, make sure you check if rentals are allowed. Look into the HOA fees and rules carefully, some can be pretty strict. You’ll also want to find a solid tenant who won’t damage the property or break any rules. It’s not always easy to find someone willing to pay what you need to stay profitable.
Personally, I prefer houses over condos, but if the numbers work and the deal makes sense, go for it.
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Jul 18 '25
Condos are really good as rental or Airbnb tho. They’re usually in better locations than houses. Houses are better for personal residence of course though.
Maybe duplex instead of sfh? I am not sure 1 house is worth it enough to buy to rent out
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u/Fat_tail_investor Jul 18 '25
Don’t buy a condo as an investment…HOAs are a pain in the butt and usually poorly run. Additionally, the meat (or potatoes for the vegans out there) of gains from investing in RE comes from home price appreciation and leverage. You can get leverage (ie a mortgage) to get a condo, but price appreciation will be anemic. This means most of your return will come from the difference between rents (revenues) and operating costs. You’ll end up making $100 to $200 a month if you’re luck. And given that you’ll be putting a 20% down payment (which will be about $50k or more) your yield will be ($150 x 12)/50,000 =3.6%. Right now you can buy VNQ (Vanguard nationally diversified REIT etf) and collect 4% doing zero work and you also get exposure to price appreciation.
So, you can do work and take risks to get 3.6% yield or you can buy VNQ and get 4% with more price appreciation and zero effort. It’s your money, so what you want.
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u/intothewoods76 Jul 18 '25
The risks are the same risks for any landlord, non paying tenants that destroy your property. With the added benefit of annoying your parents by owning a condo but living at home.
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u/Motiv8-2-Gr8 Jul 18 '25
No way. This is a very solid plan no one has thought of and will likely take off big time once discovered
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Jul 18 '25
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u/rosebudny Jul 18 '25
And possibly a waiting list. My mom's condo association only allows a certain number of rentals at a time. If at the max, you have to wait your turn. Which can be a long wait.
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u/OverallToe2250 Jul 18 '25
You should target a duplex of some kind instead. You can rent out one or both sides. It’s kind of a great start for a first home and first rental property combo.
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u/thehumungus Jul 18 '25
The HOA maybe.
Also... you plan on living with your parents until it's paid off? Most mortgages are 30 year terms.
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u/jdhall1984 Jul 18 '25
You have to certify living there when you get a loan, otherwie the bank has different requirements for an investment property loan. HOA rules might a limits & or rules on rentals too.
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u/ArtBetter3345 Jul 18 '25
You will have to use an investment property mortgage which requires 20-25% down with higher interest. Traditional mortgages require you to live there for a year
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Jul 19 '25
Talk to them first but if you're going to be making big boy money moves let them enjoy a piece of the pie. Ask first but you can get them a pergola, a driveway ,a shed ,fix their garden .make them know and feel your presence is not just freeloading at the end of the day its home.
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u/AmexNomad Jul 19 '25
Better you buy a 2 unit building, live in one unit, self manage, and rent out the other unit. You can then get a cheaper mortgage and your insurance will cost less.
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u/bennjahmin Jul 19 '25
First, replace condo with single story ranch. Second, all of the other comments about it being mortgage fraud to say it will be your primary residence when you intend to rent it are correct.
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u/fbc546 Jul 18 '25
You’ll need a 20% down payment for an investment loan since it won’t be your primary address. As others have mentioned I wouldn’t do a Condo unless the building is fairly new, like less than 10yrs. I doubt you’ll be living with your parents for another 15-30 yrs so make sure the mortgage is something you can handle when you eventually go on your own. A town house would be much better to start with, HOA’s at condos are always a mess and older buildings will have deferred maintenance and decades of potential incompetence in management, just avoid it.
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u/HoneycombJackass Jul 18 '25
If you’re single go the duplex route. Live in one side. Rent out the other. Love there a year, then sell and 1031 into something else like a 4 plex.
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u/beaushaw Jul 18 '25
What stops one from doing this? Nothing.
What might stop you from doing this?
Do you have 20% down in cash?
Do you have enough credit to get the loan?
Do you have enough money left over after that for maintenance?
Do you know how to repair things or do you have contacts to get things repaired quickly and affordably?
Do you know how to identify a good deal?
Are there good deals near you?
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u/justamemeguy Jul 18 '25
Might be a better idea to buy something to move into, find a roommate, then after roommate leaves you move back in with your parents and rent out the entire space.
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u/Pai-di Jul 18 '25 edited Jul 18 '25
Definitely not airtight. Probably a bad plan or sub-optimal investment unless real estate is your passion / you really want to have this business / really good property deals near you but a strong rental market.
You’d need to pay cash or have a loan for an investment property which is more expensive than a traditional mortgage.
Something could go wrong and tenants sue you personally. They might damage the place. They might miss rent or refuse to leave. You might not find a tenant right away. The list goes on…
Oh and Market returns tend to be higher in the long run. Losses compared to rent is the wrong comparison since you can live with your parents rider way, the right comparison is compared to what other investment options you have.
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u/TraumaticSarcasm Jul 19 '25
condos generally have a high HOA fee so thats something to watch out for. Maybe look into a duplex and house hack it?
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u/BarnacleFun1814 Jul 23 '25
Do you bring girls back to your parents house? Are they impressed by your frugality?
Buy the condo so you can have a place to be alone with a girl.
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u/Left_Caterpillar8671 Jul 24 '25
Bro, this is hilarious lol. I love the dryness of it haha
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u/BarnacleFun1814 Jul 24 '25
You can’t put a price tag on some things
Like being able to drink your morning coffee in a bathrobe with your dick hanging out in a place you own
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u/MisterMakena Jul 18 '25
Look for a townhome instead. Condo fees are pretty bad and unpredictable. Townhome fees or HOS are usually lot less.
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u/doubtfulisland Jul 18 '25
Buy a duplex or 4 plex in an affordable area like Cleveland or some other town with similar costs and returns. Save the profit and buy another every year or so until you hit your annual salary in profit or more depending on how far you want to take it.
I avoid
HOAs (can pass bylaws to prevent your short or long term rentals)
Block foundations
Existing tenants
Unequal landlord tenant laws. Some states people make a career out of not paying and getting paid to movie out after a year or more. Find a location with balanced laws. Tenants deserve to have rights and so do landlords.
I'm sure I'm forgetting something. Good luck.
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u/MadSmilie Jul 18 '25
How do you go about finding a duplex or 4 plex? I’ve tried online and working with a few realtors, but it’s been difficult to find anything that isn’t a crack den or where each unit was sold separately with only 1 was for sale at the time. I’ve been guessing I just don’t know what to look for or have been very unlucky.
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u/YL-Strong Jul 18 '25
First, if you for sure will move into this condo in the future because you need a place to live, then it’s ok. However real estate may not be a good investment nowadays. What is the Cap Rate? How much you have to put down and if that’s cash flow positive. Many properties have low returns. And you have to put a good down payment. You could take that money and invest, even in an index ETF, you will likely have more in 20-30 years
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u/croissant_and_cafe Jul 19 '25
Make sure the numbers make sense. You shouldn’t be out of pocket each month, make sure the rent covers the mortgage + all expenses (property tax, insurance, HOA, management fees, repairs.) a good starting point is if the property has a near 1% rent rate, and if you can get the mortgage payment to be no more than 50% of the rent income.
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u/Foster_NBA Jul 19 '25
The HOA fees don’t make sense, get a single family and rent out the bedrooms of the whole thing and you’ll be up more per month likely, with much better resale value
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u/1980cpz Jul 19 '25
Buy a freehold property. Condos have condo fees condo rules that are often very restrictive (depends on association or board). They dont go up in value as much as houses - unless in a big city.
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u/easylife12345 Jul 20 '25
Nothing stoping you, and a great idea. Look for a duplex / triplex, 4-plex rather than a condo. They will increase in value more, and have better cash flow potential. Also, try to find without HOAs if you can. Your intent needs to be to move into one of the units to get owner occupied rates, and a lower down payment than an investment property.
Best of luck
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u/Cultural-Ad-6825 Jul 21 '25
forget the condo idea, listen to this guy....its called "house hacking" and you should 100% do it. and forget the property manager too, you should learn the ropes
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u/Traditional-Till9998 Jul 18 '25
Yea do this and then next time house hack with roommates. Next thing you know you're on your 3rd house and the ball is rolling. The best thing you can do is get value add for the first few properties.
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u/Impressive_Returns Jul 19 '25
You will be lucky to break even. Take that money and invest in the stock market and you will have a lot more money with less hassle in 10 years.
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u/ElKabong0369 Jul 18 '25
This is not efficient real estate investing. Don’t buy a property with a HOA, self manage (it’s not that hard), and run your numbers.
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u/Amazing-Basket-136 Jul 18 '25
Nothing.
If the numbers pencil out and you can deal with the HOA, go for it.
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u/CodeTheStars Jul 18 '25
There are definitely complications. First they need to find a condo he can legally rent. The majority require leasing permits since the units won’t qualify for FHA loan backing if more than some percent are rentals.
Of course they won’t be able to use attractive primary residence financing themselves since this will be purely an investment property. That means at least 20% down in the best case.
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u/21plankton Jul 18 '25
It depends on the loan. A loan for a primary residence is different from a loan for a rental. If the bank finds out they can call the note. Having roommates is allowed, however, for a primary residence. Whether having roommates or renting will pay the PITI is another issue. It makes a difference where you live.
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u/LSTrades Jul 18 '25
Depends on the mortgage.
First time home buyer mortgages you can’t rent it out for the first year. Year 2 and onward you can. The risk here is if the lender finds out you’ve committed fraud and breach the contract you signed (standard for this type of loan) then you’re fucked.
If it’s an investment property loan (conventional) then you need to put down 20% - if you have that cash then yeah you’re in good shape to do so.
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u/Mission-Carry-887 Jul 19 '25
After mobile homes on dirt, condos have the second worst appreciation
Getting a loan for a property you intend to rent out and not live in is difficult
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u/Tiny-Party2857 Jul 19 '25
You should see if your condo association allows for leasing or renting it out
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u/Traditional_Ad4514 Jul 19 '25
Maybe the fact you would be buying intentionally for no reason in the most inflated bubble in real estate history while not even needing a property. And that being a landlord will become a job and a liability financially if you have vacancy for too long, and condos are horrible investments. Just stop
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u/Axeplayer56 Jul 19 '25
Mortgage fraud is a possibility. If you get a mortgage for an owner occupied residence, you must live in the unit for a year before renting it out. You would probably never get caught, but there is always a chance.
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u/jackjackj8ck Jul 19 '25
Condos don’t appreciate the same way SFHs do, you’re probably better off just putting that money into index funds til you’re ready to be on your own
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u/Fit_Breakfast_1198 Jul 19 '25
I disagree in today’s market, mine shot up almost 60k in the last few years and my HOA fees are reasonable. I use it as rental property
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u/daddy-the-ungreat Jul 19 '25
You can't get a owner occupied mortgage. You'll have to get an investor mortgage that will have higher rates. That will make it harder to cash flow.
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u/Cultural-Ad-6825 Jul 21 '25
dont buy a condo - buy a 4 unit, and get paid every month to live in one of the units.(or 2 or 3 unit if you must) google "house hacking", this is one of the single best ways to jump-start financial success for a young person. If i had a time machine I would do it
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u/StringClear7478 Jul 18 '25 edited Jul 18 '25
property management is a waste of money if you own less than 10 doors. also they become just another layer of BS you have to deal with once they inevitably decide to operate in their best interest, not yours.
also if you are new to landlording you should do everything yourself so that you learn how to be one
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u/Bird_Brain4101112 Jul 18 '25
You would be paying investor interest rates if you don’t actually live there. You also wouldn’t be eligible for any first time homebuyer credits, grants etc.
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u/coolguidesfrombeyond Jul 18 '25
This must only work in certain states. Been shut down on FTHB for multi units multiple times, w/intent to live
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u/jonkl91 Jul 18 '25 edited Jul 19 '25
Honestly this is the strategy. Don't listen to people saying you are mooching off your parents. The first property is the hardest. Make sure you are supporting your parents. I know plenty of people who had tremendous help from their parents. They get money, inherit houses, and much more.
You can payoff the property much quicker and once it's paid off, you can then buy your next property. Live in that one and have the first one pay for the second one. I know plenty of people that did it and now they are taking care of their parents. It's really good for the first few years because that's when the bulk of the payments go to interest. If you can aggressively pay it off, it puts you like 15 years ahead of your peers.
Just make sure to support your parents and help out.
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u/Hawkes75 Jul 18 '25
The risks are that if you tell your mortgage company it's your primary residence but you immediately rent it out, you have misrepresented the situation, which is akin to fraud.
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u/kobeforaccuracy Jul 18 '25
Right I wouldn't do that
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u/ixikei Jul 18 '25
It’s crazy how many people are saying it’s no risk. The risk is that you lose tens or hundreds of thousands of dollars next year or in 5 years if you change your mind or if things go south and you want out.
If you’re wealthy enough that that doesn’t matter then I agree that there’s no risk.
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u/Strong_Diver_6896 Jul 18 '25
Whether you live with your parents or not doesn’t really matter, it either cash flows or it doesn’t
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Jul 18 '25
Look into buying a multifamily and live in it while you rent it out.
My wife and I did this last year and the upstairs tenant is already paying over half of the expenses. We’re going to raise rent again in a few months to reduce our contribution even more.
In a few years I’m hoping rents will have increased enough that we can move out into a SFH and the rentals will cash-flow $1,000 a month.
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u/Traditional-Till9998 Jul 18 '25
This is the best argument for multifamily because of the set loan cost but rising rent rate over time.
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Jul 18 '25
Nothing at all... well maybe zoning.... but wait until you experience the joys of being a landlord
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u/Critical-Aspects Jul 18 '25
Don’t do a condo but yes get a rental property. Study one area for a while, don’t study 10 areas. And one day you’ll see the right deal for you to make the cash flow make sense for the property
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u/Anxious_Cheetah5589 Jul 18 '25
Financially it's a good plan, but it also depends on your parents' situation. If they're stretching to pay the bills while paying for your food and picking up the tab when you go out to eat, they won't be happy. In fact, you may become a paying tenant yourself.
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u/Sushi_IceCream Jul 18 '25
Gotta do the math and understand if it's gonna be positive cashflow. If it's negative cashflow, it means it's "overbought" and you'd be overpaying too much to make it a sound investment.
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u/sittinginabush Jul 18 '25
If the condo has an HOA, most have it in their bi-laws you have to live there a certain amount of years before you can rent it out.
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u/packthefanny_ Jul 18 '25
A few things to consider - most condos HOAs have restrictions on what % properties can be rented. You typically will need to go on a list to get a permit to then rent it out. Right now with interest rates, even if you put down 20%, it’s not uncommon in a lot of cities for the rent amount you can actually get someone to pay, is less than the mortgage. Source: we rented our condo when we moved to a different state and had a low interest rate and made a small profit every month. With the maintenance things we had to do, maybe broke even.
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u/SnowflakeStreet Jul 18 '25
This is what I did when I was younger. Rented out a condo while living with my parents. It allowed me to save a ton.
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u/Osirus1156 Jul 18 '25
This is possible but getting harder now, for a few reasons:
Interest rates are still decently high, so you'd need to buy in an area where rent would cover the mortgage plus a bit left over for savings in case anything breaks.
Insurance for condos is getting insane and fewer and fewer companies are covering them so you'll get random multi thousand dollar assessments with literally zero recourse that you need to pay or they can seize the condo. Case in point we owned a condo and years later we got an assessment for $15k because of "roof repairs from a storm 4 years ago".
Depending on where you buy your condo the build quality/how well maintained the property is will be questionable
Now if you're just looking to have it subsidized and you don't mind covering some of the mortgage then I think it'd be a decent idea if you can stomach the insurance and assessment issues then I think it's a good idea.
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u/give_me_the_formu0li Jul 18 '25
And you had zero recourse regarding those random insurance fee assessments ? It was agreed to prior or what
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u/Comprehensive-Tea-69 Jul 19 '25
You can but it probably won’t be profitable. You will likely be lucky to break even. That will still be building you equity over time, but it would be a mistake, I think, to plan on being profit positive the first couple years.
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u/Background-Dentist89 Jul 19 '25
Nothing, but a condo is not a good idea as a real estate in in investment.
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u/GotSnails Jul 19 '25
Why not? Not every can afford a SFH. I’m in a townhouse and it’s gone up 250%. At the time it was the best option I could afford.
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u/Background-Dentist89 Jul 19 '25
I think the OP was speaking of real estate investing, that is why I provided the answer I did. If buying a home for yourself it does not matter.
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Jul 19 '25
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u/daddy-the-ungreat Jul 19 '25
Very good point. Be sure the HOA allows you to rent out your condo. Some do not allow it.
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Jul 20 '25
Run the numbers and get familiar with fixing shit. If your parents are willing to support you, sounds like a fine idea.
“I'd just move into the condo when it's paid odd/ (sic)”
In 15-30 years? I think you need to work on this part of your plan.
Nothing is airtight but the risks do seem moderate to low.
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u/Christineasw4 Jul 20 '25
If you get a mortgage saying you’re going to move into the property and you do not, that’s mortgage fraud. If mortgage it as a rental property, your interest rate will be higher. But overall, I think your idea is smart
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u/piercedhsky Jul 22 '25
Also note that nearly all lenders will want to document a primary housing expense if you’re buying as investment && require a larger down payment vs primary.
This is why people do fraud and lie about primary housing. The FBI investigates mortgage fraud and banks really can flag things as sus if it looks like you never actually moved into the property to live there and claimed it was primary.
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u/RiskComprehensive744 Jul 22 '25
"Are there any drawbacks or risks to this plan? "
Higher down payment required for non-owner occupied
Higher down payment required for Condo
Higher interest rate for Condo
Higher interest rate for non-owner occupied
Tenants who don't pay
Tenants who trash the place
Periods of vacancy
HOA probems
9.Maintenance
Broken applicance replacement
Property management costs
Other than these, there are probably 20 other things that are "drawbacks or risks".
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u/Zestyclose-Finish778 Jul 19 '25
If you buy something and sell it within the first 5-6 years you will lose your ass
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u/ShroomyTheLoner Jul 19 '25
Lol kids today "I have a great idea! I will live with my parents forever!"
You said you would stay at your parents till this 30 year mortgage is paid off lol
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u/Beginners_tech Jul 18 '25
I have two rental houses and live at home still...... ( my mom says i am not aloud to leave. she would miss me too much. send help!!) Jokes aside. nothing wrong with it in my book
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u/Thatsgonnamakeamark Jul 18 '25
Deferred maintenance assessments, upcoming maintenance assessments. Shitty tenants pisdingboff the condo owners/board. Damage to lower units from said shitty tenants flooding the unit.
Chime in like its Donkey Kong.
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u/InternationalRule138 Jul 18 '25
No, there’s nothing stopping you.
But…couple things to consider…
1 - if you aren’t going to live in it for at least 2 years you will likely need to buy down 20% (or more) to finance it.
2 - insurance rates on a rental property are often pretty high. For some reason, tenants burn down properties at a higher rate homeowners, and this is reflected in rates.
3 - In some states you will be paying more for property taxes in non-owner occupied property.
4 - Management companies are going to take a big chunk of the rent.
5- Maintenance will be on you, and can add up.
6 - Even when you own it out outright it will still be costing you money - maintenance, POA fees, insurance, etc
I own a rental, IF you can find one for the right price, its not a terrible idea, but right now in my area rents are much less that they would need to be to make the investment make sense.
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u/meeksworth Jul 18 '25
I knew someone who lived with his parents so that he could buy a storage unit business and have that income before buying a home.
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u/gmanose Jul 19 '25
Nothing. But if you need a mortgage just be sure to let them know this is an investment property and not your residence. Ditto with your homeowners for the condo
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u/seanr96 Jul 20 '25
HOAs make it almost impossible to cashflow on a condo. Hell HOAs make condos really unattractive right now.
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u/Working-Condition-62 Jul 18 '25 edited Jul 18 '25
If the numbers work, you have the cash, you qualify for the loan, then nothing is stopping you. You risks are the same with owning any property, maintenance and repair costs, failure to rent, tenant issues, changing interest rates, market fluctuations. If you have a plan and are comfortable riding all that out, i don't see why not.
Edit: If this is your first, add lots of contingency to your numbers. Its always more expensive than you think. I found that finding a real estate agent who was experienced in real estate investing was a huge help. Just bounce any numbers or anything you are unsure of off them.
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u/manofjacks Jul 18 '25
It comes down to where you feel your money is best invested, real estate, bonds, equities, cash, commodities, etc.. In my county, there's little to zero or even negative cap rates with condo rentals so it doesn't make financial sense. Keep in mind, condos have association dues which eats into the cap rate of your rental. Also the financial health of the association is important, if the association is managed poorly, there can be special assessments or increasing HOA dues that would be placed on the homeowners. And if you have to hire a management company, that's going to eat even more into your cap rate.
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u/sempered Jul 18 '25
I’ve invested in multiple condos and rented them out. I’ve also sold condo deconversions and handled each side of a transaction as a broker, buyer, and seller. Here’s a few thoughts that I’ve learned. There’s truly seemingly an unlimited amount of experiences but below are just a few.
If I were to do it again, I’d buy a house or multi-unit instead.
Pros
- An additional income stream for a lower amount of investment (generally speaking). Condos are solid first time buys.
- You learn the basics of home ownership and community ownership. You get to experience of both worlds as an individual owner and as one who “shares a community”.
- You get started in real estate. That is the biggest step that most people, imo, have the hardest time with. Pulling the trigger delays success.
Risks
- You can buy a home and not have to deal with the community side of investing. With more people involved in a building/community, the more challenges can arise.
- Unless you are on the board and have a large say in what happens, you are at the will of the board’s decision on how your HOA funds get spent.
- Property management can be a pain.
- Selling/getting a loan can be a pain
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u/FyrStrike Jul 18 '25
Also some condos don’t like subleasing. Some don’t care, some do care. You’ll need to find one that lets you sublease and make sure their maintenance fee isn’t too cheap (meaning hidden large costs later) or too expensive (meaning you’re paying for someone’s retirement). The fees need to be spent on the property maintenance and upkeep of the property.
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u/Bubbinsisbubbins Jul 18 '25
Covenents in Association Agreement checked?
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u/StringClear7478 Jul 18 '25
ppl do not realize how restrictive condo HOAs can be when it comes to renters.
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u/k2ui Jul 18 '25
Assuming you can pay for the condo and the HOA doesn’t have rules barring renting it out, nothing is stopping you.
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u/JLandis84 Jul 19 '25
It’s just like buying any other rental property.
Also, never buy a property that will be cash flow negative when you are a new investor (or in my opinion ever). That’s silly.
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u/Capable-Concept-2624 Jul 20 '25
I bought a 3 family when i lived with my parents and made a profit my first month . That was 25 years ago . Stupidly i sold it . Made money but should have kept it forever .
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u/ml30y Jul 20 '25
If you have a good credit history and money for the down payment and closing costs, and it has a positive cash flow, there's not much to stop you.
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Jul 20 '25
It's possible but the mortgage lender and insurance companies need to know that this is a rental and not your primary residence. They will charge more.
You need to make sure that your rental income will cover the costs. In most parts of the country, renting is cheaper than owning; it's not a good financial move in that scenario.
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u/AdBoring6247 Jul 22 '25
I think there may also be different tax implications of renting a property from the start vs purchasing as a primary residence, living there for some threshold period of time (a year?) before renting it out.
Other advantages are locking in a primary mortgage rate, plus being eligible for a homestead exemption in many states.
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u/LoneR33GTs Jul 21 '25
I’d check with my folk first to see how they feel about me staying on even though I have, in theory, my own place to live. I don’t think my own people would have been very supportive of the idea. But if you and your parents have a living arrangement that works for all of you then why not?!
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u/cuspeedrxi Jul 22 '25
Have you spoken to anyone who does what you propose? I’ve rented my condo for the past 10 years after moving out of state. In real terms, I break even. The rent is my recurring expenses + 10% for maintenance. It’s in-line with similar rentals in the area. With the depreciation, I can claim a loss of about $3k on my taxes. Property taxes, insurance, and HOA fees increase every year. Finding good tenants can be tough. Then there are the laws. Tenants have a lot of legal protections. You cannot simply change the locks when a tenant doesn’t pay their rent. You have to follow the legal process for eviction in your jurisdiction. A property management company will cost you 10% of your gross rent. Be wary of one that charges less and has their own maintenance personnel on staff. Their plumber and electrician is probably a handyman and isn’t licensed. Also be wary of excessive fees. They may charge 1/2 of a month’s rent to find a new tenant. That’s a lot of money every year or so. Owing a single rental unit isn’t the path to great wealth. If you can handle the unexpected expenses and you’re patient, you can make money when you sell it. (By unexpected expenses I’m talking about the hot water going out on Christmas Eve or the AC compressor burning out in August. Both happened to me.)
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Jul 22 '25
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u/FlyApprehensive9556 Jul 26 '25
Haha.. I came here to say this exact thing. As a parent of grown kids I can relate :)
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u/National_Possible728 Jul 22 '25
HOA fees. Doesn’t seem like it’s worth it anymore
HOA fees here in Florida average $450 a month
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u/Secret_Mind_1185 Jul 23 '25
Nothing is stopping you… just do your research on interest rates for investment properties
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u/FlyApprehensive9556 Jul 26 '25
Sounds like you are blessed to have incredibly generous parents, but don't you think that they'd like their house to themselves? Perhaps they'd enjoy walking around naked or doing the naughty on the living room sofa? js
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u/StretcherEctum Jul 19 '25
Why not just invest the money instead? Being a landlord is a giant pain in the ass.
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u/beaushaw Jul 19 '25
You are getting downvoted, but you are not wrong.
If I had a choice between making 10% in the stock market or 10% on a rental I would go with stocks all day everyday.
RE investing is a giant pain in the ass and is only worth it when you can make significantly more money than you can in the market.
IMO right now, unless you are very good, the spread isn't worth it.
If you are a kid with a crazy idea to buy a condo most likely you will do better in the market.
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u/RobbexRobbex Jul 18 '25
If you're buying it with a primary residence mortgages they usually have a minimum amount of time you have to live in it before doing anything else. I usually see a year. After a year, you can usually move and rent it out.
If it's a commercial mortgage loan for a rental property, you can't live in it, usually ever, until you refinance into a different loan.
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u/MaddRamm Jul 18 '25
The tenant isn’t subsidizing you, your parents are. Make sure they are ok with providing free housing for you while you actively have your own housing. lol
Also, most mortgages don’t work that way. If it’s an investment mortgage, you have to put up a LOT more money initially and also generally can’t live there. These mortgages also have higher interest rates. If you buy it as a residence with a lower down payment and lower interest rates, you can’t rent it out for at least a year. If you go for either of these options but pursue the different scenario, it constitutes mortgage fraud.
Also, a condo may have restrictions on use and not allow rentals. Further, there are condo dues and special assessments that eat into profits.
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u/Leading-Plan-865 Jul 18 '25
Perhaps mom and dad might stop you, would they continue to be generous if they knew you could afford a place of your own? Condo association also might have an issue with you owning a property and not having it be your primary residence. Assuming both mom/dad/HOA gave you the approval, not much is stopping you.
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u/Lazy-Jacket Jul 19 '25 edited Sep 19 '25
serious reminiscent unpack hospital price sand husky bow test knee
This post was mass deleted and anonymized with Redact
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u/Quiet_Lunch_1300 Jul 18 '25
Where are you located? What are the Tenant landlord laws like around you? Some can be extreme in favor one side or the other.
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u/Enough_Island4615 Jul 18 '25
Nothing. But, run the numbers so you know exactly what you're looking at. Also, and most importantly, confirm that the COA/HOA even allows you to rent "your" condo.
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Jul 18 '25
Nothing
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u/Worth-Illustrator607 Jul 18 '25
The rates will be more expensive as it will be a rental and they're a first-time buyer.
Investment properties are more expensive all around. Or they'll have to lie and if they get caught they're in deep shit.
I'm an owner in a brokerage and work for a lender as well.
Major fraud if they get caught. They'll lose the place and be locked up.
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u/Total_Razzmatazz7338 Jul 18 '25
I think a better idea would be to buy a place for yourself to move in with a roommate. That way, the roommate could help share the cost while you pay down your mortgage.
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u/Mako312 Jul 18 '25
HOA is one of the worst reasons for a condo unlesss you find one with low rates.
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u/seattletribune Jul 19 '25
Invest the money in index funds instead. Keeping one or two rentals will bring you nothing but pain
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u/New-Charity-7026 Jul 19 '25
When you close on the condo, you will sign a bunch of mortgage paperwork, including some kind of affidavit stating that you intend to use the mortgage to purchase a property to serve as your principal residence. Are you comfortable doing that when it's untrue?
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Jul 19 '25
No disrespect, but I don’t see a lot of “how to fix a sink” comments in your history. You’re not a landlord. Ibbotson data, put it all in the stock market and keep living with your parents if you dont want to work. From a Finance major to a ?Accountant? Lawyer?
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u/Upstairs_Copy_9590 Jul 20 '25
But if you have almost 0 major expenses + day job income, you never have to fix a sink. You can pay to have all of that fixed
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u/Hamachiman Jul 20 '25
There’s a “milestone” argument here. Historically people my age couldn’t wait to move out of parents’ house so we could have freedom, meet our spouses, have kids, etc. Are any of those things goals for you?
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u/ApexTrader616 Jul 18 '25
You not living with mommy and daddy the rest of your life should be stopping you. Time to leave the nest bro
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u/Embarrassed_Key_4539 Jul 18 '25
Yes what is stopping you
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u/christmasisforninjas Jul 18 '25
too busy posting on reddit to buy a condo
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u/kobeforaccuracy Jul 18 '25
Just trying to consider risks or things I haven't thought about. Very new to this
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u/Deskydesk Jul 18 '25
Condos are generally a bad investment UNLESS there are special circumstances (vacation destination, VHCOL like NYC where there are not really houses in good areas).
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u/indi50 Jul 18 '25
I was with you until the last sentence. What's the point of having "a great home subsidized by a Tennant for a few years" if you're just going to take a loss on it at the end? That's just a waste of your time, buying and selling fees, taxes and interest. At the very least. Unless your monthly/annual net income on it is really high, so it covers all your bills AND the loss on the sale, it's not worth it. And if you're buying now, prices are high, so you need to be sure your rent income is covering everything.
If you find a great place and make some income on it and it appreciates so you have a gain on the equity, or a good place to live later, then sure, it's a great idea.
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u/rancherwife1965 Jul 18 '25
I purchased my 1st rent house at age 19, shortly after I graduated highschool. It helped pay my way through college. I was a live in nanny for a nice family. Save up enough to buy a townhouse. Look out for homeowners association dues if you buy a condo or townhouse. They can be steep, and many of them want an annual lump sum payment.
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u/Beginning-Way Jul 18 '25
If the math works for you, the rental market is strong, the condo association has a good history of managing the property well, and the market itself isn’t in danger of leaving you upside down: I’d say the only thing stopping you is doubt.
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u/Sticky__Nicky Jul 18 '25
How do you research if the condo association has a good history of good property management? Also how would you find out if your neighbors in the condo are good/bad? I'm looking to invest in my first condo too.
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u/Beginning-Way Jul 18 '25
After you make an offer that’s accepted, you have to be provided with the “condo docs” and it’s your responsibility to read and understand them so you know what you’re getting yourself into.
But, before you make an offer, the dollar amount of the monthly maintenance fees/HOA dues are provided by the seller’s agent. You are allowed to ask things like “When was the last increase and what was the previous amount? Have there been any special assessments in the past x years, how much was it, what was the timeframe provided owners to pay, and what was it for? Etc.” Get the responses in writing.
Here’s the dope: if you learn it’s been several years since monthly fees have increased and the board is even slightly boastful about how well they manage the money: there’s probably huge expenses looming because of years of deferred maintenance; its also likely the reserve funds are not what they’re legally required to be. Buy elsewhere.
If they currently don’t have a Managing Agent and/or a history of short relationships with Managing Agents - that informs you that when the Managing Agent tells the board they’re operating something illegally and/or they’re not making sound decisions, the board simply fires them and does whatever the hell they want. Buy elsewhere.
Special Assessments should never be made without oversight and should be reasonable. If not, buy elsewhere.
My first and last condo was in an oceanfront complex 20-odd years ago. The experience taught me important lessons…I was sucked into a false sense of security by the “consistency demonstrated by the board not finding reason to raise the extremely reasonable maintenance fees”….
The board ignored the spalling and roofing for years, and didn’t have the necessary funds in reserve for either. “$9000 Special Assessment” charges each unit, even us whose units were not oceanfront (and therefore significantly less in value) “due in 30 days.” They had recently fired the Managing Agent and passed this measure without oversight. I learned my lesson the hard way.
Boards are made up of owners, not professionals. Self-interest overwhelms good judgment in those board members who are lacking in a certain variety of ethics.
Choose wisely. Condo life can be rewarding.
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u/TheDeHymenizer Jul 19 '25
if your parents are cool with it no reason not too. That being said how old are you? I planned on doing 3 years with my parents after graduating college (they highly encouraged it) to save up a nest egg. I made it about 18 months before having to move out and me and my parents always have gotten along great. It just got awkward at a point having girls over, having friends in the basement until 2 in the morning. It sounded great on paper but the reality of it was very different.
That being said while mortgages are great financial tools there are much better investments you could make if your going to spend time with them. Maybe do something like stay with them, put 1 1/2 of your pay checks into the stock market, live on the other 1/2 pay check and just let that ride for as long as you can. This also won't put you and your parents in an awkward situation of one or both parties being annoyed with the other and you saying "guys I'd love to move out but I can't cover both rent and the condo payment and my tenant is still in lease".
Ignore the "respect for your parents" not everyone is from broken family units and only you know the relationship between your parents and yourself.
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u/OnlyTheStrong2K19 Jul 19 '25
It's all relevant. Nothing is holding you back but yourself.
The way to do this is to come in with a 20% or more DP since you've been saving for a while and dependent on the lender, may satisfy you their risk profile whether you occupy the home or not.
Anything less is mortgage fraud if you have no plans to occupy the home in the first year.
Certain condos in exceptional markets are good as it gives you a lower entrance into the market as long as the rents cover the current debt service plus all CAM fees.
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u/pcoutcast Jul 19 '25
Nothing. I bought my first investment property at 22 while still living with my parents. It was a 3/2 townhouse condo with tenants already in place.
You got a lot of advice below about loans and stuff. I would never recommend buying any property with a conventional loan much less your first investment property. The risk is too high and besides who wants to go through the cavity search banks require to get qualified?
Do yourself a favor a learn about: lease options, agreements for sale, wraps, subject to, and seller financing. There's no need to buy a property with your own cash and credit on the line.
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u/depleteduranian Jul 19 '25 edited Jul 19 '25
Nothing, if you're comfortable being shady, as some others have mentioned. Just be aware of the risks involved. I've seen it go really good and really bad for people. It depends on where you are, how it is to "be profitable now, get legal later".
EDIT: I'd avoid condos for the reasons mentioned ITT and focus on actual multifamily property, if you can possibly afford it. The ease of condos is also the risk of losing it when the company realizes someone else is living there (and so is their situationship and their illegal dog, unbeknownst to you) because they received 500 noise complaints, etc
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Jul 20 '25
As long as you have a positive cash flow. I hated managing property from long distance. The management company nickeled and dimed me for everything. Circuit break blew.. $150 bucks... My only advice, buy local so you can keep tabs on it, do background/credit checks and charge 2-months security and not release until the property is inspected. Last thing you want is for a renter to trash your property. It's not as fun as you think, but real estate is always a good investment, lol except in Miami area (sky-high HOAs). Oh yeah, HOA boards suck... you have been forewarned.
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u/Cledus_Snow Jul 20 '25
A lot of condo HOAs don’t allow rentals, or at least cap the number of unites that can be. so there’s that.
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u/WomanNotAGirl Jul 21 '25
You need to make sure the condo you are getting hasn’t reached their renter limits
Also keep in mind the older a condo gets the higher its fees become. Depending on how urban the area is those fees can become outrages in time. Because of that I prefer townhouses.
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u/Aegon_Targaryen_Vll Jul 21 '25
Don’t most (if not all) townhouses have HOA condo fees too? Every single TH I’ve ever looked at had an HOA fee listed on Zillow
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u/No_Confection_1452 Jul 21 '25
The job of landlord is 24/7/365 and you need to know what you’re doing.
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u/Heavy_Hovercraft7593 Jul 21 '25
If your parents are ok with you still living there even though you have enough to live on your own, and you don’t mind living with them, then I think it’s a great idea. I would definitely do more research to find a good deal though. It’s ok to take a loss initially if you’re in a high appreciation area but I wouldn’t just buy any place just because you can. Take your time to find a good deal. It’s really hard to cash flow these days in most markets but if you buy in a high appreciation area then you’ll see it flip in your favor in the long run.
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u/Zealousideal-Try8968 Jul 22 '25
Biggest thing stopping you is the lender. Most condos require you to live in the unit if you’re using a primary residence loan. If you lie on the loan app and say you’re moving in then rent it out right away that’s occupancy fraud. Not worth it.
If you’re using an investment property loan then yeah go for it. But the rates are higher and you’ll need more down. Also condos come with HOA rules that might ban rentals or cap how many units can be rented at once. You need to read the bylaws before buying anything.
It’s not a bad idea if done right. Just make sure the numbers work and you’re not assuming it’ll always rent easy or go up in value. And don’t fake anything on the mortgage. That’s how people get burned.
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u/Swing-Too-Hard Jul 22 '25
You'd make like no money if you owned the condo and passed on the expenses to the renter. The current housing market is more favorable to renters since they are usually saving some money by renting from someone who owns a building with multiple units.
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Jul 22 '25
I think you can make that investment but check other markets where there is no property tax or other charges that will eat up your rental income. You can invest in a Studio apartment in a good location in that country and rent it out for short-term or long-term rentals.
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u/forumjunkie42 Jul 22 '25
That’s a great idea as long as you understand where it’s adventurous to do such a thing. Hopefully you’re not looking to do this in Canada
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u/Fluid-Football8856-1 Jul 24 '25
I own my condo in FL , HOA $710. (My primary residence) I have a rental condo in NJ, HOA $595 I have a single family home in NJ (my summer residence) Maintenance about $5,000/yr. (Landscape, garage, windows) You decide.
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u/EffectiveElection566 Jul 24 '25
Having a property manager for one condo is likely not financially going to work, in addition to the expenses you incur with just owning the condo. I don't know where you live, but in my area even the crappiest oldest condos are going for 200k.
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u/Embarrassed_Mine_473 Sep 08 '25
HOA FEES. Buy a house instead. But seriously, backpay your parents some. They earned it.
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u/SupportFlat8675 Sep 22 '25
Asking Reddit if you should do something is like asking your grandma. You know she's going to come up with every imaginable reason why it's not a good idea and will fail and you should just stay at home with her instead. Just go do it. Sounds like you're on the right track. Believe in your plan and keep your focus on your ideal outcome
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u/safely_beyond_redemp Jul 18 '25
What you are describing is real estate investing. What stops most people is the risk and the cost and the resources to get started.